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Archive for November, 2013

Portland became the first city on the East Coast to legalize the recreational use of marijuana, on Tuesday.

Portland voters approved a citizens referendum that legalized the recreational use of marijuana in city limits by a vote of 9,921 to 4,823, according to unofficial results released by the city clerk Tuesday night.

“Most Portlanders, like most Americans, are fed up with our nation’s failed marijuana prohibition laws,” said David Boyer, the Maine political director for the Marijuana Policy Project, in a statement. “We applaud Portland voters for adopting a smarter marijuana policy, and we look forward to working with city officials to ensure it is implemented.” The ordinance will allow adults, who are at least 21 years old, to possess up to 2.5 ounces of marijuana and requisite paraphernalia for recreational use. While people can use marijuana on their personal property, the language bars them from using it on any public infrastructure, including sidewalks, parks and roadways; but landlords and building owners can opt to bar smoking on their property.

The ordinance will be enacted 30 days after the election results are certified by the city clerk, according to the city code, and cannot be repealed for five years unless it’s done by citizen petition.

The Citizens for a Safer Portland Coalition, which was comprised of the Portland Green Independent Committee, the Marijuana Policy Project and the American Civil Liberties Union of Maine, led the legalization effort and gained the support of the Libertarian Party of Maine, the Marijuana Caregivers of Maine and a group of local legislators. “This sends a clear message that Mainers are ready to have a conversation about a statewide tax and regulation structure,” said Diane Russell, D-Portland, who championed legalization legislation on the state level that ultimately went down to defeat.

Oregon farmers could put in a crop of industrial hemp next spring if a panel of experts can satisfy federal officials with a set of tightly drawn rules. The committee of agricultural experts and state policy officials has been selected by the Oregon Department of Agriculture and will come together in December, the Oregonian reported .

The committee hopes to set up a program that will meet what the federal government calls a “robust” standard, said Jim Cramer, a market and certification official in the department. He said the goal is to do so in time for planting.

Oregon is one of seven states with laws permitting industrial hemp — a strain of marijuana with only a trace of the plant’s psychoactive chemical.

Hemp’s historic use has been for rope. These days it is put to hundreds of uses: clothing and mulch from the fiber, for instance, and foods such as hemp milk and cooking oil from the seeds, as well as creams, soap and lotions.

Oregon officials have held off implementing the state’s 2009 law, saying they would wait until the federal government reclassified marijuana from a substance prone to abuse and lacking medicinal value.

That has not happened, but an opinion issued in late August explained the federal government’s decision against challenging recreational marijuana laws in Washington and Colorado. The memo set priorities on marijuana and said a “robust” system for enforcing state marijuana laws is less likely to threaten federal priorities.

Cramer said his department sought written confirmation from the federal government that it would not oppose an industrial hemp program in Oregon, but it hasn’t gotten a formal response.

“What we want is for the federal government to say these are robust,” he said of the rules the group is drafting.

He said the committee is researching industrial hemp rules in Colorado, North Dakota …read more

Taxing what you can’t measure is nonsense. But Colorado voters were poised Tuesday to do just that, by taxing wholesale marijuana sales at 15 percent — when no wholesaler exists. That’s right: Most Colorado adult-use marijuana sales must go directly from producer to consumer with no wholesaling allowed, and no wholesale price as a measure for the wholesale tax! That’s because Colorado law, at least at first, requires vertical integration of marijuana businesses.

Vertical integration? Here’s an example: A wine company owns land, vines and a winery, and sells to consumers only at its own outlet store. Substitute “marijuana grow area” for land and vines, “marijuana production facility” for winery and “marijuana retailer” for outlet store, and you understand the Colorado model. Colorado law will require that at least 70 percent of marijuana sales follow that model, with the supply chain integrated vertically (from top to bottom) — and with no wholesaler.

So how do you apply a wholesale level tax when no wholesaler exists? With great difficulty. Colorado regulatory authorities are struggling for answers.

Basing a tax on a fictitious price means no one will ever know the correct tax. Taxpayers will spend time and money trying to beat the system, and government will spend time and money in self-defense. Government and business are likely to grow irritated with one another as they argue about unanswerable questions.

Our dysfunctional international income tax system should have taught us that taxing what we can’t measure is crazy. Multinational corporations like Google, Amazon and Starbucks pay little tax anywhere as they transfer assets among subsidiaries. What do they charge themselves for those assets? (How much does the right hand charge the left hand?) Current transfer pricing rules allow multinational corporations to construct artificial prices for sales between related parties, sales that almost never occur in the …read more

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